2018-07-17

Chinese Home Prices Soar 1.1pc in June, More Crackdowns Launched

Now we know why the tone around real estate regulation turned extremely harsh over the past few weeks. New home prices jumped 1.1 percent in June. Existing home prices only rose 0.70 percent. The largest increases were in Dandong, Sanya and Haikou. There are some local economic factors driving prices in these cities. Dandong is near North Korea and a potential opening of the DPRK ignited speculation in that city. Sanya and Haikou are the major cities in Hainan, which became a major free trade zone. Removing these cities only drops the average price rise to 0.9 percent nationally though.

Here's a chronology of recent posts on real estate starting from May 31 and going forward in time. Many posts are news stories, the *starred* posts have a some commentary and analysis or more in-depth translation/discussion of the article.

The Kunming Municipal Housing and Urban-Rural Development Bureau recently issued the "Notice on Launching a Special Work to Combat the Infringement of the Interests of the Masses and Governing the Real Estate Market", which is proposed from July this year. Carry out a special treatment for the chaos in the real estate market for half a year, focusing on cracking down on speculative real estate behavior and real estate “black intermediary” to regulate market order.

The notice proposed that the special governance work will focus on rectifying monopolistic housing, operating house prices, reluctant sales, disseminating false information, and hiring people to create speculation in real estate speculation. At the same time, Kunming will also focus on rectifying the "black intermediary" to violently expel the lessee, malicious deduction of deposits and deposits, collusion with speculative real estate gangs, forced bundling services and other violations.

The notice also stated that it will severely crack down on real estate development enterprises to collect deposits, sincerity and other fees from purchasers before they obtain pre-sale permits for commercial housing; they do not sell commercial houses according to the government's filing price requirements, and increase the price in disguise; Selling more than one room will damage the legitimate rights and interests of the purchaser; after obtaining the pre-sale permit for the commercial house, it will not disclose all the saleable houses and the pre-sale price in one time within 10 days.

In addition, false real estate advertising is also the key governance object of this special governance work. The notice proposes that it will severely crack down on misleading buyers by misinterpreting real estate policies, publishing false listings and price information, and publishing pre-sale advertisements for real estate projects that have not been licensed or filed.